Legislative Committee Hires Lobbyists To Seek Change In IRS Code

The Legislative Committee, co-chaired by Neville Reid and Ira Bodenstein, has, on behalf of NAFER, hired the lobbying firms of Moran Global Strategies, Inc. and Aquia Group to assist in attempting to have legislation enacted that would provide a substantial benefit to receivers: the same ability to request a prompt determination from the IRS that currently exists for bankruptcy trustees under Bankruptcy Code section 505(b).

Under section 505(b), a bankruptcy trustee is able to send an estate return to the IRS and either (i) receive a response within 60 days with an acknowledgement that the IRS has received the return and is not raising any issues, or (ii) at the expiration of 180 days with no response, presume that the IRS has no issues with the return.  In either instance, the trustee is the able to move forward with a distribution to the estate’s creditors without the risk of personal liability for unpaid taxes.

No similar mechanism exists for federal receivers, leading to delays in receivers making distributions for fear of future IRS liability.  Instances where receivers have waited several years to make distributions, specifically because no response had been received by the receiver after filing a final return, are not unusual.

Once the need was identified, the Legislative Committee in conjunction with the Tax Committee prepared a draft of legislation that would provide receivers with the same protection that bankruptcy trustees enjoy.  The lobbyists leading the charge for NAFER are James Moran, a former 24 year congressman from Virginia, and Ryan Dattilo, who previously acted as Chief Antitrust and Bankruptcy Counsel to the U.S. Senate and House Committees on the Judiciary.  Together, we are confident that Jim and Ryan will guide us through the process of enacting this important protection for receivers. Ongoing updates will be provided.